BlackFin dives into European Fintech

Venture capital and private equity firm BlackFin Capital Partners has completed a more than €100mn first closing for a European business technology fund, with the fund’s founding partner telling EMEA Finance that the aim is to become a leading investor on the continent.

The BlackFin Tech Fund 1 will invest in financial technology, insurance technology and regulatory technology and counts initial investors such as French government agency Bpifrance, Vaudoise Assurances Group, Groupama Group, Societe Generale’s insurance arm Sogecap, Natixis Assurances and Swiss Life among its early backers.

“There is a unique combination of factors that make investing in FinTech and InsurTech opportunities particularly attractive,” Paul Mizrahi told EMEA Finance.

These include user behaviours that see faster and deeper adoption of new technology products and services, as well as “incumbent financial brands that have lost a lot of goodwill, and new expectations from millennials”, said Mizrahi.

Other factors include the cheapness of technology, an interest in the sector by non-financial buyers such as media groups and telecom operators and a willingness from regulators to spur the Fintech industry forward.

All aspects of retail and investment banking, payments, wealth and asset-management, insurance, insurance distribution, financial software as well as technology related to regulatory requirements are being targeted, the company said in a statement.

“[There are] more open minded regulators than ever,” said Mizrahi. “Combined with European - not necessarily including UK - new regulations designed to foster more competition and hence encourage new companies.”

These regulations include the second iteration of the European Markets in Financial Instruments Directive (MiFID II) due to be implemented in January next year, Payment Services Directive II, which regulates payment services and will be fully implemented across Europe by the start of 2018, and various European consumer laws for insurance products.

The fund will be deployed across continental Europe and headed by Julien Creuzé, while Maxime Mandin will cover German-speaking countries.

“One challenge is to manage the very substantial deal-flow we see across Europe,” said Mizrahi, who estimates that the fund sees around 60 opportunities a month. “We are hence increasing the size

of our Fintech team from three to six professionals, not including the five partners of BlackFin and the rest of our investment team in Paris, Brussels and Frankfurt.”